Small business owners feel pinch of reform

by Clay Neely

(Editor's note: This is the third installment in a continuing series by The Newnan Times-Herald on the federal Affordable Care Act and what it means for Coweta area residents and businesses.)

Christopher Smith is the owner of three Valvoline Instant Oil Change locations - one in Newnan and two in Peachtree City.

As an employer, Smith currently staffs roughly four to six employees at each location.

When he first learned about the passage of the federal Affordable Care Act, Smith didn't make any immediate moves. He relies on information from his insurance agent. After everything he had read or heard on the news, Smith concluded that because he has less than 50 employees on staff he didn't need to worry about it.

His company currently offers health insurance, but it's not a popular item with his employees.

'We're not paying minimum wage, but it's still not cost effective for them to subscribe to our company-offered health insurance through Blue Cross Blue Shield. We have a lot of single guys who feel like they don't need insurance, so they just don't want it,' said Smith.

For about a year, he had been asking his agent, 'Do I need to do anything? What's going on? What's going to happen?'

His insurance agent responded that, in fact, most of the insurance companies don't really know what to do either except to offer the assurance they will do whatever the government tells them to do.

What Smith's agent did advise him to do was distribute a three-page memo explaining the marketplace and the options available to his employees - a list of places to go to buy health insurance on their own, which would be more affordable than what his company offers.

Smith then heard about the 'P3 Initiative.'

'I received a call from my payroll company, which said 'look into this. It's in effect,'' he said.

The P3 Initiative requires employers to 'take full ownership' over their adherence to Department of Labor requirements and promote openness and transparency when it comes to the health and safety of employees.

The goal of the program is to have employers 'find and fix' violations, ensuring compliance with safety, wage and anti-discrimination laws before an investigator comes into the workplace.

In other words, the burden is on employers to obey the law, not on the DOL to 'catch' employers in a violation.

'There are auditors that go from business to business to ensure that things are working correctly, very similar to OSHA. Just another thing that kind of makes it difficult for small businesses.'

'I have a friend who operates in California, and following some of the things I've had to go through, I called him to warn that they're so incredibly strict. A lot of times, the agents will come and tell you what you're doing wrong, so in many ways it's easier for them to come tell you what to do than read the legal jargon,' he said.

His employees have not asked him about the new health care act and Smith feels they're not really thinking about it.

'If I had not already had insurance through my company, I honestly don't think I would have known what to do, personally,' he said.

His view on the law?

'It makes me pretty nervous,' said Smith.

'Just from history and other countries, it doesn't seem as good as it sounds. I think a lot of people are under the impression they're getting free health care, but eventually you're going to pay, one way or another,' he said.

Jason Bedingfield is a local lumber trader and sales manager for G Plex Forest Products and for his own company, Industrial Pine.

He is currently the only one employed with Industrial Pine. When he first heard about the ACA, he just carried on with business as usual.

In the last few years, he has wanted to expand and hire new people, but because of the mystery surrounding the ACA, he is apprehensive about hiring full-time personnel.

'I've taken on several parttime 1099 (contract) employees. But at the end of the day, they want health insurance. They wanted the job with the guaranteed health insurance, subsidized by the employer, and I just can't offer it to them,' said Bedingfield.

'Nothing lasted more than two months, and it breaks my heart because I need the help.'

Bedingfield believes that with the new law people are going to have to look at getting their own insurance, and with companies lowering people to 29 hours, they're going to have to look at becoming a 1099 employee just to get those hours.

'I remember when I got out of college, the idea was you found the job, got the insurance and the retirement plan. If something else came along, great… but that was your career. I am so far away from that world now that I can't even imagine going back to that model of a full-time job with full-time benefits,' said Bedingfield.

'And I can't imagine anyone out of college getting into that situation unless they're extremely talented at what they do.'

In regards to his current health care plan, he is not shy about detailing his current ordeals.

When Bedingfield went independent in 2009, he purchased his own policy for his family that remained at the same price for two years.

In summer of 201 1 , it increased 50 percent.

'I thought that this is what happens. It just goes up over time. Then, last year, it went up another 50 percent and I was upset,' he said. 'I called them up and they said 'we are sorry sir, it's just part of the implementation of the ACA. We don't know what we're up against.' So it seemed that they were increasing everyone's monthly because they didn't know the repercussions.'

Recently, his insurance company announced yet another change in the policy.

'They were increasing it again 50 percent, so now we're looking at $1,000 a month with no maternity. I was furious. I called them again and heard the same refrain; their hands are tied because of the ACA,' he said.

Bedingfield immediately got on the phone with eHealthInsurance and found a similar plan by Humana but at only half the cost. After speaking with the Piedmont Hospital billing office, which said it was a good plan, he pulled the trigger. However, before he got off the phone with the nurse, she took time to vehemently complain that her health insurance premiums were increasing as well.

With all these fluctuations, Bedingfield sees the need to think outside the box.

'For our first child, Blue Cross said the total cost was $35,000. I worked out a plan with the last two babies, paying in cash, that was roughly one-fifth of that. You can write that off your taxes as well,' said Bedingfield.

'People are going to have to start doing things like that. The monthly price for Blue Cross is totally unaffordable. I'd rather pay a lower monthly and come out of pocket every so often than pay that inf lated monthly over and over. That's how we have to do it,' he said. And what exactly is his view on the ACA?

'It's reinventing the wheel. The online exchange? It's already there. Will these private exchanges like eHealth-Insurance have to compete against the government? The private online exchanges get a commission. Through the ACA, if they're a government employee, I don't foresee a big commission. So you have commissioned workers vs non-commissioned workers. Efficient vs non-efficient. Bureaucracy is, by nature, inefficient,' said Bedingfield.

'The biggest thing to me,' said Bedingfield, 'are people getting their hours cut. To me, it feels like we're heading into a part-time economy. Instead of having your career job, now you're part-time with no benefits and you're probably working two part-time jobs to make ends meet.'

However, B eding f ield believes that for small business the ACA may contain a silver lining.

'I'm optimistic that many people will have to find the liberation of self-employment,' he said. 'Maybe this will be a wake-up call to everyone who has always wanted to work for themselves. It's empowering.'